Springboard: Greater China to dominate APAC networking market

By Computerworld Hong Kong Staff | May 27, 2009

Thumbnail: 

Greater China's enterprise networking equipment spending is forecasted to grow at a compounded CAGR of 13% from $2.6 billion in 2008 to $4.3 billion by end-2012, said Springboard Research Friday.
 
The analyst firm added that greater China’s share in the Asia-Pacific (excluding Japan) enterprise networking equipment spending will grow from 43% in 2008 to 46% by 2012.
 
“China signifies an emerging opportunity in Asia-Pacific for enterprise networking, given the fast-paced growth of domestic enterprises as they expand their business footprints beyond existing boundaries, and a strong manufacturing vertical,” said Bryan Wang, research director for connectivity at Springboard Research. “Moreover, the ambitious investment plans of the government to pursue various e-governance initiatives and the country’s preferential location in the region also make China a lucrative market."
 
Finance and public sectors drive demand
Springboard’s research also pointed out that unlike other regional markets, banking, financial services and insurance (BFSI) and public sector investments in enterprise networking will continue to rise significantly through 2012; emerging as the key demand drivers in the Greater China region.
 
“BFSI is among the largest networking spender in China and hence represents a lucrative business opportunity for equipment vendors. Also, the recently announced economic stimulus plan by the Chinese government will build upon significant recent public sector investments in network deployment; thus increasing overall spending on networking,” Wang said.
 
SMEs in China have also emerged as big networking spenders according to a Springboard survey of 100 IT decision makers in enterprises of all size classes spread across the Greater China region. The research firm further found that 45% of mid-market respondents covered in the survey said that their networking budgets comprise more than 40 % of their IT budgets.
 
A survey by Springboard also revealed that the top three networking concerns of Chinese enterprises are network performance, network security and risk, and network efficiency. Main factors called out by survey respondents that influence their network purchasing decisions are equipment provider’s expertise, technological strength and value for money, in that order, the research firm said.
 
“Compared to other country markets in the region, Chinese customers still spend a large portion of their IT budget on infrastructure related products such as router/switches, security, and voice equipment. Therefore, their experience with different networking equipment brands will directly imply to their future investment for application/solution based purchase,” said Wang.